The latest semi-annual ULI/E&Y Real Estate Consensus Forecast, which was prepared by the ULI Center for Capital Markets and Real Estate and released on Tuesday, predicts that U.S. commercial property transaction volume will reach $430 billion by 2016, exceeding the volume of 2006—the last year before the bubble popped. Moreover, the latest multi-year outlook (covering 2014 through 2016) projects steady growth for the U.S. economy; sustained strength from real estate capital markets; and continued improvement in both CRE fundamentals and the housing sector.

All in all, it’s a fairly optimistic outlook, and an improvement from the previous survey released last fall. The current survey was conducted between Feb. 19 and March 14, 2014, and is the fifth in a series of polls conducted to gauge sentiment among economists and analysts about the direction of the real estate industry.

The Consensus Forecast expects the overall U.S. economy to continue expanding at a rate about the same as the 20-year average. GDP is expected to grow by 2.8 percent in 2014 and then 3 percent in both 2015 and ’16. Survey respondents predict that employment will grow by more than 7.5 million jobs in the next three years, with the unemployment rate falling to 6.3 percent by the end of this year, 6 percent by the end of 2015, and 5.8 percent by the end of 2016.

As for CRE, office vacancies will decrease to 14.3 percent in 2014; 13.7 percent in 2015; and 13.1 percent by the end of 2016, with continued growth in office rental rates through 2016. Retail properties will see modest improvements in availability rates over the next three years, with rates declining to 11.5 percent by 2014; 11.1 percent by 2015; and 10.8 percent by 2016, according to the survey, which also predicts that end-of-year 2014 apartment vacancy rates will be at 5 percent; 5.2 percent in 2015; and 5.3 percent in 2016. Apartment rents will be up between 2 percent and 3 percent each of those years.

Construction Spending Rises Slightly in February

U.S. construction spending edged up 0.1 percent month over month in February, according to the Census Bureau on Tuesday. All together, the annualized rate came in at $945.7 billion for the month, compared with $944.6 billion in January. The February 2014 figure was 8.7 percent higher than the in February 2013.

Spending on private construction projects edged up by the same small amount, 0.1 percent. Likewise, spending on public construction was up 0.1 percent. The federal government is spending less on construction than it used to, but the relative recovery of state and local government budgets in various parts of the country means that state and local construction projects are once again going forward. Even so, overall public construction spending is at 2001 levels.

Spending on private non-residential construction projects was up 1.2 percent for the month in February, and has really been gaining ground in the last year, though these gains have been from low levels of activity. For example, spending on retail project was up 18 percent year over year in February, while office construction spending gained 19 percent and lodging construction spending grew a whopping 40 percent.

Wall Street had another up day on Tuesday, with the Dow Jones Industrial Average gaining 74.95 points, or 0.46 percent. The S&P 500 advanced 0.7 percent to hit a new record high, and the Nadsaq gained 1.74 percent for the day.